Mr Price under siege

Mr Price is getting hammered for its controversial acquisition of German-based retailer NKD Group, with many stakeholders slating the decision.

On 10 December 2025, Mr Price announced plans to acquire 100% of Pegasus Group Holding, NKD’s retail unit, for €487 million.

Founded in 1962 and headquartered in Bindlach, Germany, the retailer operates with a local supplier discount model.

NKD focused on small to medium-sized towns in Central and Eastern Europe rather than major metropolitan hubs.

It has approximately 2,100 smaller-format stores across Germany, Austria, Italy, Slovenia, Croatia, the Czech Republic, and Poland.

NKD was owned by the British private equity firm TDR Capital, which bought the German retailer in 2019.

Mr Price is currently in the process of acquiring NKD. However, many investors would like this deal to be stopped.

After Mr Price announced the deal, investors started dumping the company’s shares. Its share price declined by 20% in a month.

Many high-profile funds and equity experts expressed concerns about the valuation and the feasibility of a European expansion.

Among these vocal shareholders was Benguela Global Fund Managers, which not only penned a letter to Mr Price’s management team but also took its concerns to the JSE.

36ONE Asset Management is another Mr Price shareholder that has been vocal with its concerns about the NKD acquisition.

It believes that the transaction represents a strategic pivot and that additional capital will be required to recapitalise NKD.

36ONE, like Benguela, believes the transaction should have been put to a shareholder vote.

It criticised Mr Price’s board for the handling of the announcement and an apparent lack of shareholder engagement related to this acquisition.

36ONE claimed that the board avoided meaningful consultation, despite clear shareholder disapproval, as shown by the share price decline.

“Unfortunately, the board and management have taken the transaction so far down the line, without canvassing even their largest shareholders, it would be difficult to reverse,” it told Daily Investor.

Mr Price deal slated by top analysts

Top analysts, including Grant Nader from Benguela Global Fund Managers and Shane Watkins from All Weather Capital, criticised the deal.

“Investors don’t like the deal, and for good reason,” he said, highlighting that Mr Price has a history of bad international deals.

“Mr Price went to Chile and left after five years. It then went to Australia and also left the experiment after five years,” he said.

Watkins added that South African retailers’ track record of investing overseas has been poor. This includes Woolworths buying David Jones and losing billions.

He said there are many reasons to dislike the deal, including that a large part of the business is in Germany, a developed market in which Mr Price lacks expertise.

Another problem is that NKD made losses in four of the last five years, which means it is not a healthy business. “It has been dressed up by private equity to sell,” he said.

Nader is even more scathing, explaining that South African retailers which ventured internationally have often destroyed value.

He added that Mr Price, which is a quality business, is not buying a good company. “NKD is a poor company with bad margins,” he said.

“The company has hardly made money over the last five years, and Mr Price is paying a premium for this business.”

“It is in a structural decline in terms of market share in Germany, and it is set to dilute Mr Price’s earnings.”

An even bigger problem is that Mr Price will leave the current NKD management in place, allowing them to continue as is.

“How do you extract value from a poor business by doing nothing? You are just buying it and hoping it will turn itself around,” Nader said.

“You are either going to pump money into it or hope for a miracle, as Mr Price has no unique expertise it can bring to the table.”

He added that this is a material change to Mr Price’s business, and shareholders should have a say on whether the deal should progress.

Mr Price is steaming ahead

Mr Price is steaming ahead with its planned acquisition of NKD despite severe shareholder backlash.

On Friday, 23 January 2026, the retailer informed shareholders that its acquisition continues to make progress regarding the fulfilment of the deal’s relevant conditions.

The only condition left to fulfil is gaining approval under the European Commission’s Foreign Subsidies Regulation.

Mr Price said the review period for the submission has commenced, and no undue delays are expected.

The retailer also announced that it plans to host an investor presentation on 17 March 2026 to provide further insight into its acquisition target and its growth prospects.